Two major U.S. retailers say they'll shun fuel produced from oilsands

EDMONTON - Two large U.S. retailers listed on the Fortune 500 have announced they won't buy fuel derived from Alberta's oilsands as part of their efforts to fight climate change.

Organic food store Whole Foods and home furnishings chain Bed, Bath and Beyond are believed to be the first major private-sector companies to tell their fuel suppliers they don't want gasoline or diesel refined from crude oil coming from the oilsands.

Refining the oil emits significantly more carbon dioxide than the production of other fuels.

"We lead on issues," Whole Foods vice-president Michael Besancon said Wednesday. "That's what we do and it's what's expected of us."

Considered the world's largest organic food retailer, Whole Foods has 289 stores in three countries and more than a billion dollars in sales.

Bed, Bath and Beyond has more than 1,000 stores in the U.S. and Canada. Its new policy states the company will prefer fuels - where possible - with lower greenhouse gas emissions.

"Of current and particular concern," says the policy, "are fuels produced by refineries taking feedstocks from the Canadian tarsands."

Andrew Frank of the environmental group Forest Ethics, which worked with the two companies to get them to make the move, said he expects more private businesses to make similar moves. Forest Ethics has already targeted U.S. branches of Safeway, Walmart and Radio Shack.

"It's an ongoing campaign," he said.

Whole Foods will manage to avoid oilsands-derived fuel by buying from at a refinery in Indiana that isn't able to process heavier oilsands crude. Nikki Skuce, who worked with Forest Ethics on the campaign, concedes the grocer won't be able to dodge the oilsands in the western United States, where no alternative yet exists.

Any immediate impact on the amount of oilsands crude flowing to the U.S. will be less than minimal, however.

Besancon said only up to about 10 per cent of the fuel in his company's vehicles comes from the oilsands. That works out to about 380,000 US gallons a year - the equivalent of about 53 barrels of oil a day, or roughly .00004 per cent of the crude the oilsands send south every day.

Still, it's another move by American environmental groups to limit oilsands expansion by curbing their market. It also comes the day after Alberta budget documents revealed that the oilsands are going to be the province's main source of energy revenues.

Twenty-one U.S. states have announced their intention to bring in a low-carbon fuel standard that would penalize oilsands oil.

In 2008, U.S. mayors passed a resolution at their annual conference in Miami that urged cities to ban the use of oilsands-derived gasoline in municipal vehicles.

No U.S. city has so far taken up the challenge, said James Brainard, who heads the climate policy committee for the mayors' association.

"This was one thing that was suggested to the mayors," said Brainard, mayor of Carmel, Ind. "It's hard to tell where your fuel comes from."

Greg Stringham of the Canadian Association of Petroleum Producers said the industry is aware of Forest Ethics' campaign and is mounting its own public relations effort to the targeted companies.

He said he's confident the U.S. will continue to be an eager customer for oilsands crude.

"From their perspective, the energy security that Canada brings is a critical part of that discussion," he said.